This paper provides a detailed account of firms’ behavior during the COVID-19 pandemic. We use the “Survey on the Status of Firms under the COVID-19 Pandemic” conducted by the Research Institute of Economy, Trade, and Industry (RIETI) in November 2020, which received responses from about 5,000 companies that are mostly small and medium-sized enterprises. Moreover, this study provides an overview of the damage suffered by firms, the responses they took, and the financial support measures they used. It also examines the attributes of firms that used the support measures. Taking advantage of the fact that some surveyed firms also responded to surveys conducted during the Global Financial Crisis (GFC) in 2009, we also focus on the differences between the GFC and the COVID-19 pandemic. We obtained the following four major findings: (1) Many firms experienced the adverse effect of the pandemic by a decline in sales to customer firms and consumers. Many of them coped with the damage mainly by taking out new loans from financial institutions and by giving a leave of absence to employees. (2) The percentage of firms whose financing conditions worsened during the COVID-19 pandemic was about the same as during the GFC, whereas the percentage of firms whose financing conditions were severe was higher. (3) For many of the support measures, firms with low credit scores before the COVID-19 pandemic tended to use them more frequently than those with high scores. (4) The share of zombie firms that were unable to continue their businesses without support from financial institutions or the government varies wildly across different definitions of zombies. However, the share is not always higher during the COVID-19 pandemic than during the GFC for all the zombie definitions. The share of these zombie firms that used government support measures was higher than that of non-zombies. We observe this tendency both during the GFC and the COVID-19 pandemic.
